Obama dangles idea of medical malpractice changes, but would it make much difference?

"I'm willing," President Obama said last week in his State of the Union speech, "to look at other ideas to bring down costs, including one that Republicans suggested last year -- medical malpractice reform to rein in frivolous lawsuits."

Democrats harrumphed, and Republicans eye-rolled their skepticism soon after President Obama uttered it.

"I'm willing," the president said last week in his State of the Union speech, "to look at other ideas to bring down costs, including one that Republicans suggested last year -- medical malpractice reform to rein in frivolous lawsuits."

It's a highly charged debate -- often oversimplified as doctors v. trial lawyers, or Republicans v. Democrats -- with dueling studies and lots of spin and murk on both sides.

$11 billion impact

One thing is clear, despite the rhetoric, the savings gained by tightening medical malpractice laws would be a relatively small fraction of the nation's overall health care spending.

"We found that the malpractice premiums doctors pay would decrease, but there would be really no impact on employer sponsored health insurance" said Michael Morrisey, a UAB professor, who has co-authored several published studies on malpractice changes such as imposing caps on damage awards and their effects on costs.

A Congressional Budget Office report found that most commonly proposed malpractice reforms, which includes the damage caps, would save the government one-half of 1 percent of its health care costs a year. A drop in the bucket, for sure, but reform advocates point out that, when it comes to health-care spending, each drop means big bucks. In this case, using the CBO figures, that's about $11 billion per year.

"We are at a point now where you have to be looking for every drop you can find," said Frank B. O'Neil, spokesman for ProAssurance Corp., a Birmingham-based company that is the fourth-largest writer of medical professional liability insurance in the country. "You're wrapping this up with other reforms. This is one particular thing."

O'Neil agreed that a cap on damages would lower insurance losses and therefore lead to lower premiums for doctors. But he said there's also an immeasurable cost benefit to limiting malpractice lawsuits and damage awards because it would positively change the doctor-patient relationship. He said eventually such changes would curb so-called defensive medicine.

More tests, procedures

Advocates of tightening malpractice laws say doctors order more tests and procedures, at a greater cost, as a defensive measure against lawsuits. The CBO found reducing defensive practices would lower overall spending by three-tenths of 1 percent.

Cumberland School of Law professor Jack Nelson, a co-author with Morrisey on the malpractice reform studies, said that, while the CBO found some savings, his studies with Morrissey didn't find any of note.

"That is controversial, how much are those savings going to be," Nelson said. "It's a very hard thing to measure."

While it's unclear what kind of malpractice reform Obama would be willing to support, bill proposals have featured the caps on damages. On the day before Obama's Tuesday speech, Rep. Phil Gingrey, R-Ga., introduced a bill, co-sponsored by Rep. David Scott, D-Ga., and Rep. Lamar Smith, R-Texas, that would put a $250,000 cap on non-economic damages such as pain and suffering. The measure also would limit lawyer contingency fees. This type of malpractice reform would cut down on runaway verdicts and curb frivolous lawsuits, supporters say.

Years ago, the Alabama Supreme Court declared unconstitutional a 1987 state law that capped damages, but other states have imposed them.

Alabama doctors through their association have supported this type of legislation in the past, said Niko Corley, spokesman for the Medical Association of the State of Alabama.

"In fact, the lack of medical liability reform was one of the key reasons the medical association didn't support the (national) health reform plan" passed last year, Corley said.

Despite Obama's nod to the GOP push, federal legislation in the near term is a longshot, at least the legislation currently being pitched. Nearly identical reform legislation failed in the Republican-controlled Congress under President Bush.

Obama may tip his hand soon on what he would support. On Thursday in a Senate committee, under questioning from Sen. John McCain, R-Ariz., Health and Human Services Secretary Kathleen Sebelius said she would submit the administration's guidelines for malpractice reform.

"We're going to find out whether the trial lawyers run this place," said McCain, according to ABC News, echoing the skepticism that reform backers have voiced following Obama's speech.

Protecting the patient

It's no secret that plaintiff's lawyers have vehemently opposed damage caps among other aspects of the proposal.

"If a child is paralyzed by the negligent act of a health care provider, an arbitrary $250,000 is woefully inadequate to recognize the incredibly difficult life that child will have to live," said malpractice attorney Mike Ermert with the Birmingham law firm Hare Wynn Newell & Newton.

Ermert argues that current state law already is stacked against an injured patient.

"I think Alabama medical malpractice laws need reforming but they need reforming for patients and family to achieve justice," Ermert said. "The vast majority of medical malpractice cases filed in Alabama are won by the doctor or hospital."

Shay Samples, a plaintiffs' lawyer at the same firm as Ermert, said the idea of malpractice reform as a cost-cutter and eliminator of frivolous lawsuits makes no sense. Prudent lawyers won't take a case unless they know it might have a chance, he said.

"I'm a .¤.¤. fool to take a case unless it has merit because it's going to require substantial investment to hire experts and bring it to trial," Samples said.